Author Question: Are mergers always beneficial? What are some of the factors that prevent mergers from being ... (Read 227 times)

cool · **on:** Sep 11, 2019

Question 1

What are the important differences between being organized as a 501(c)(3) or a 501(c)(6) not-for-profit organization?

What will be an ideal response?

Question 2

Are mergers always beneficial? What are some of the factors that prevent mergers from being successful?

What will be an ideal response?

Juro · **Reply #1 on:** Sep 11, 2019

Answer 1

501(c)(3)
Donors can deduct contributions
Postal rates are favorable
Exempt from Federal Unemployment Tax Act
Exempt from state sales tax
Lobbying to influence legislators and lobbying in political campaigns is absolutely prohibited.

501(c)(6)
No restrictions on engaging in lobbying
Contributions made by the CVB may be deductible as business expenses
Donors cannot deduct charitable contributions
Less favorable postal rates

Answer 2

There is no guarantee that mergers will be beneficial. Clashes between different management philosophies and cultures can be ruinous and the wrong people may be fired in the aftermath of mergers. However, most are beneficial because of: 1. cost savings; 2. synergies; 3. economies of scale; and 4. increased leverage with suppliers.